Just as retailers have seized upon the digital age to shake up the way they sell to consumers, consumers, savvier than ever before, have become self-assured advocates for their own shopping experiences.
The evidence of their confidence is clear. A Signifyd survey found that nearly 84% of consumers have no sympathy for retailers who feel the competitive need to accept returns with no questions asked.
Indeed, these modern consumers are not ashamed or sheepish. They return with abandon. They approach retailers with the attitude of, “Hey, you make the rules. We just figure out how to bend them.”
Both legitimate and fraudulent returns constitute one of ecommerce’s most fierce headwinds. Product returns cost UK retailers around £60 billion per year and can account for about 10% of their business.
Retailers must create positive experiences with their customers to forge a special bond that limits their passive attitude to returns. Here, we explore why consumers may have a difficult relationship with retailers, and what you can do to resolve it.
Return policies can win or lose customers. However, while an open return policy can open your business to abuse, a tight policy may cost you in return customers. Signifyd’s Consumer Sentiment Survey found that when grading retailers, building a better relationship begins with understanding that customers do not understand the true cost of returns.
Shoppers want to be able to return products for virtually any reason. Our numbers show that retailers would be wise to think carefully about their return policies and then express them clearly and in a way that is easy for consumers to access and understand.
What exactly do the numbers say? Firstly, retailers cannot expect much sympathy from consumers when it comes to returns. Nearly three-quarters, 74.5%, said they never feel guilty when returning a product.
When asked whether they feel any sympathy for retailers who feel a competitive need to accept returns whether anything was wrong with the product or not, nearly 84% said either that they’d never thought about the issue or that it was simply the cost of doing business.
Another 9.7% said the situation doesn’t really make sense, but that’s just the way it is. Only 6.6% said they thought the reality was unfair to retailers and that they expected things to change.
That said, nearly three-fifths of consumers, 57.7%, said they carefully check return policies before they buy. Another 33.4% said they just assume they can return an item for any reason.
It’s clear that consumers expect returns to be available, and that they do not recognise their damage. However, a negative return experience can be damaging. For 75% of people, a poor return experience was reason enough for them to stop shopping with a retailer.
So, what’s the solution to building better relationships? Well, 82.6% of consumers said they’d be likely to buy more from a retailer who had offered them a good return experience.
Retailers should be thoughtful about their return policy and present it in a clear way for their customers. You don’t have to provide free returns but be crystal clear about what your conditions are.
Data breaches trust
Finding out that your data has been breached is heart-breaking. You can be left uncertain over what information has been taken, and if it will cause any further security risks for customers in the future. However, consumers are less forgiving than you may expect.
Well over half of the respondents assume their personal data has been stolen in some form of data breach in the past and a like number have seen a fraudulent charge appear on their credit card accounts. A significant portion of those, by the way, say those fraudulent charges leave them with negative feelings about the retailer involved, no matter who is to blame.
This feeling of being cheated breaks trust, and in turn can lead to retailer abuse which damages businesses. While only 8.1% of consumers said that they had filed a claim with your credit card company saying an item was not delivered, even though it actually was, it’s a hard-hitting amount when considering it comes out of the pocket of the business.
And that’s just for starters. Another 6% of survey respondents admitted to keeping a product they were not satisfied with and making up for their disappointment by asking their credit card companies to reverse the original charge for the product.
Drawing a straight line from data breaches and fraudulent charges to bad behaviour on the part of a small percentage of consumers would be impossible to support and potentially unfair to the companies that have been victims of fraudsters and hackers.
But it is clear that data breaches have become a way of life and that consumers are well aware of the potential peril they face because of them.
Retailers should provide transparent and real-time communication. Reassure customers that you have safeguards in place to protect their data and to protect them from fraudulent orders.
Returns aren’t the only awkward customer exchanges
Of course, tackling returns is only part of the equation. As we mentioned earlier, retailers are also facing consumer abuse at a level that they haven’t before. And our survey results indicate that a small but significant percentage of consumers feel entitled and don’t hesitate to take advantage where they can.
The results of consumer abuse often show up in non-fraud chargebacks, often called friendly fraud. The most common variety of non-fraud chargebacks occurs when a customer says an online order never arrived at their address – an item-not-received claim (INR). When they make the complaint to their credit card company, the card issuer takes the charge back – and on behalf of the customer, recovers the money and fees from the retailer accused of failing to deliver the goods.
Similarly, a customer might file a claim if the item they did receive was significantly not as described, also known as a SNAD claim.
Such disputes are the most fraught for retailers, who can fight the consumer’s claim, but by doing so the merchant is calling its customer a liar. After all, things do go wrong. Packages are stolen off porches. Packages get lost in transit. Items are inadvertently poorly displayed or described on ecommerce sites. Customer issues can certainly be legitimate.
But sometimes customers seek to take advantage, and the real trick is to know when the customer is right and when the customer is gaming the system.
Overall, 64.8% of our survey respondents said that they had filed a chargeback. The biggest reason respondents gave for filing a chargeback was that the item never arrived – 25.3% said that was their experience. Another 10% said the item that arrived did not live up to expectations, given the description and presentation on the merchant’s site.
Nearly 18% said they hadn’t made the purchase they were charged for, and 11.6% more said someone used their credit card without their permission.
Members of the 18% were likely fraud victims. The second group no doubt included those who had children or other relatives who used their card without their knowledge.
Ultimately, communication is key to building stronger relationships with retailers. Retailers should confirm their customers’ orders immediately and lay out the timelines for delivery. Quickly communicate any snags in fulfilment and tell them what to expect under the new circumstances.
For consumers, controlling their commerce destiny has become like breathing – a daily activity that takes place without even thinking about it. Retailers need to embrace that reality and celebrate the fact that there are willing consumers out there who want to buy what they are selling.
The fun part for retail professionals is building experiences that allow their customers to do that without encountering the kind of friction that setting up protective barriers generates. It takes a certain fearlessness, a confidence that the enterprise is protected by the systems and people that have been put in place to do just that.